Quote from: Stevets on March 09, 2014, 06:01:24 PM

The main thing I can see wrong with my analogy is that the "vault" does not actually contain money since nobody actually "has" Bitcoins. They just have the secret code needed to send from an entry in the public ledger. The analogy falsely implies that your "vault", or wallet as it might be interpreted, contains coins, when in reality it just contains the private key necessary to update the ledger.

The analogy works a bit better if we put all the vaults in a huge super-secure building. We can call that building "The blockchain". Nobody is allowed to remove any money from the building, they can only take money out of vaults for which they have the combination, and put that money into the slots on whichever vaults they'd like.

Now, in this analogy, your vault is not your "wallet". It's just a bitcoin address (see why we need to use the address to number the vault). Your wallet is that leather billfold in your pocket (that's why its called a "wallet"). Notice that all the money is in the vaults (addresses) in the building (blockchain). All you have in your billfold (wallet) is a list of combinations (private keys) since it's difficult to remember them all. As long as you have the combinations (private keys) either in your billfold (wallet) or elsewhere, you can use the index in the lobby (public key) to find the vaults (addresses) that you control. If you only have the index entry (public key) or address (vault) it does you no good, because you can't access the money in the vault (address).

The analogy starts to fall apart a bit when you try to account for the purpose of mining and how the new bitcoins enter the system. And the analogy becomes a mess when you try to use it to explain confirmations, orphaned blocks, and double-spend attempts.